Allied Irish Banks, p.l.c. Interim Results 2001
description
Transcript of Allied Irish Banks, p.l.c. Interim Results 2001
Allied Irish Banks, p.l.c.
Interim Results 2001
A number of statements we will be making in our presentation and in the accompanying slides will not be based on historical fact, but will be “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward looking statements. Factors that could cause actual results to differ materially from those in the forward looking statements include, but are not limited to, global, national and regional economic conditions, levels of market interest rates, credit or other risks of lending and investment activities, competitive and regulatory factors and technology change.
visit www.aib.ie/investorrelations/home/
Forward looking statement
Michael Buckley
* excludes €13m goodwill amortised
Shareholder value
Profit Attributable
€463m
Tangible EPS *
55.4c
Dividend per share
15.4c
Return on Equity
20.4%
+12%
+11% +14%
Profit before Taxation
€667m
1
Strong retail momentum continues in Ireland and Britain - profit up 15%Rep. of Ire. - profit up 16%
deposits +16%, home mortgages +22%
GB & NI - profit up 13%deposits +18%
Capital Markets - profit up 13% corporate banking loans + 27%, fee income +
47%
Highlights *
Cont …/* growth since June 20002
Allfirst - earnings up 6%
- Q2 earnings up 10%
- strong asset quality
Poland - challenging economic conditions
- merger completed
- investment programme on target
Highlights
\….. Cont.
Cont …/3
Other income up 13%, now over 40% of total income
Prudent provision cover across the Group
Profitable Singapore experience
Highlights
\….. Cont.
4
Key performance drivers
Strong customer revenues
Costs well managed
Continued investment for sustainable growth
Asset quality maintained
5
* for illustrative purposes only
2%13%
85%
Relationship Businesses 98%
Asset & Wealth Management & Advisory Business
Other
Customer driven business - core strength*
Banking Business
6
Transferable core competence in retail & commercial banking
Relationships at heart of our business
Focussed Asset & Wealth management
Vibrant corporate banking business spans our markets
Sharing eBusiness initiatives & exploring opportunities
Different markets - one approach
7
Outlook - Ireland
Above trend growth will be generated by:
Harvesting own customer opportunities
Further productivity gains through channel optimisation
Maintaining asset quality
8
Outlook - GB & NI
Leveraging off proven success in SME niche
Building on unique customer franchise in Northern Ireland
Monitoring of market for acquisitions / alliances
9
Outlook - USA
Restoring revenue momentum by repositioning / business mix
Retain asset quality and efficiency foundation
Nourish and invest in ‘Not for Profit’ business
Actively pursue footprint expansion
10
Outlook - Capital Markets
Buoyant revenues in corporate banking- domestic and international
Strong deal flow in advice led businesses
11
Outlook - Poland
Building national position from strong regional base- medium term growth - investment in network expansion- investment in new branch banking platform- realise cost benefits of merger
Intense focus on loan portfolio
12
Conclusion
“Strong, deep and resilient franchise”
13
Gary Kennedy
Performance by division
Jun Jun Change2000 €m 2001 %
323 AIB Bank 372 15
164 USA 170 4
90 Capital Markets 101 13
45 Poland 26 (42)
(13) Group (2)
609 Group profit before tax 667 9
442 Group profit after tax 502 14
414 Group profit attributable 463 12
14
Operating income
Other income (*constant currency basis +13%) Banking fees and commissions up 16%
strong corporate banking, credit card and electronic banking revenues
Ark Life up 12%
Jun Jun Change 2000 €m 2001 %
985 Net interest income 1,067 8
611 Other income 720 18
1,596 Total operating income 1,787 12
38.3% Other income ratio 40.2%
*
15
-5
0
5
10
Group Rep. of Northern Britain USA Poland
Loan growth
Ireland Ireland
%
Rep. of Ireland residential mortgages up 9%
4
6
4
8
-3
7
Since December 2000
16
0
2
4
6
8
10
Group Rep. of Northern Britain USA Poland Ireland Ireland
%
3
43
10
4
1
Deposit growth
Since December 2000
17
Net interest margin
H1 H2 H1 Change on2000 2000 % 2001 H1 2000 bps
3.10 2.94 Group 2.93 (17)
2.73 2.76 Domestic 2.67 (6)
3.40 3.08 Foreign 3.16 (24)
18
545 Staff costs 631 16 12
379 Other expenses 429 13 9
924 Total operating expenses 1,060 15 11
Jun Jun Change Underlying2000 €m 2001 % Change %
Costs include: BZWBK merger and investment AIA investment Euro and RoI - front loaded salary package
Operating expenses
19
Cost / income ratio*
* tangible (excluding goodwill amortisation)
AIB Bank 51 53- Republic of Ireland 51 52- Northern Ireland & Britain 53 55
Capital Markets 56 56
USA 62 58
Poland 80 65
Jun Jun% 2001 2000
20
NPLs / loans 1.9 1.9
Bad debts charge / average loans 0.28 0.34
Provisions / NPLs 99 98
Asset quality
Use of group provisions in Poland
Specific charge only 0.16% (excluding Poland)
Allfirst NPAs down $21m to 0.82% (US GAAP basis)
Jun Jun% 2001 2000
21
Jun 00 Average Jun 01 Average€m Loans % €m Loans %
28 0.27 AIB Bank 32 0.27
18 0.29 USA 20 0.30
11 0.34 Capital Markets 10 0.26
13 1.02 Poland 5 0.31
70 0.34 Total 67 0.28
Provisions for bad debts
22
Jun €m Jun Constant Currency2000 Assets: 2001 Change %
% Capital Ratios: %
5.4 Ordinary equity to assets 5.6
6.5 Tier 1 7.4
11.3 Total 11.8
42,825 Loans to customers 49,636 4
46,499 Customer accounts 52,479 3
74,687 Total assets 87,895 5
Balance sheet / capital ratios
23
Summary
Leverage franchise to deliver shareholder expectations
- consistent EPS and RoE performance
- customer driven revenues / productivity
- investing for the future
- asset quality through economic cycles
24
502 Net interest income 569 13
243 Other income 259 7
745 Total operating income 828 11
394 Operating expenses 426 8
351 Operating surplus 402 15
28 Provisions 32 14
323 Operating profit 370 15
- Property disposal 2
323 Profit before taxation 372 15
Jun Jun Change2000 €m 2001 %
AIB Bank profit statement
25
261 Net interest income 287 10
171 Other income 209 23
432 Total income 496 15
253 Operating costs 306 21
179 Operating surplus 190 6
18 Provisions 20 9
161 Operating profit 170 6
3 Income from associates -
164 Profit before taxation 170 4
Jun Jun Change2000 €m 2001 %
USA profit statement
26
79 Net interest income 55 (31)
145 Other income 186 29
224 Total income 241 8
124 Operating costs 134 8
100 Operating surplus 107 7
11 Provisions 8 (32)
89 Operating profit 99 12
1 Income from associates 2
90 Profit before taxation 101 13
Jun Jun Change2000 €m 2001 %
Capital Markets profit statement
27
122 Net interest income 134 10
69 Other income 73 6
191 Total operating income 207 8
136 Operating expenses 177 30
55 Operating surplus 30 (46)
12 Provisions 5 (59)
43 Operating profit 25 (42)
2 Property disposal 1
45 Profit before taxation 26 (42)
Jun Jun Change2000 €m 2001 %
Poland profit statement
28
Poland Division relative to BZWBK
BZWBK (legal entity Polish GAAP) 117 32
Use of provisions created on acquisition 22
Goodwill amortisation re BZ (12)
Other adjustments * (16)
Poland division 26
H1 Jun 2001 PLN €m
* includes capital adjustment, consolidation of subsidiaries and alignment with Group accounting policies 29
As at December 31, 2000 As at June 30, 2001NPLs/ Total NPLs/ TotalActual Provisions/ Actual Provisions/
NPLs Advances NPLs NPLs Advances NPLs €m % % €m % %
232 1.0 125 AIB Bank 253 1.0 124
87 USA - €m 8281 0.7 205 - US$m 70 0.6 241
29 0.4 262 Capital Markets 25 0.3 334
523 Poland - €m 6092,014 18.0 62 - Pln m 2,052 18.0 61
871 1.9 100 Total 969 1.9 99
Non-performing loans by division
30
1.611.69 1.781.961.741.611.630.0
1.0
2.0
3.0
1995 1996 1997 1998 1999 2000 H12001
0
10
20
30
40
50
60
70
Return
Average RWA (bn)%
Return on risk weighted assets
31
20,015 AIB Bank 22,728 14
19,117 USA 22,188 16
12,696 Capital Markets 16,747 32
3,063 Poland 4,164 36
277 Group 284 2
55,168 66,111 20
Jun Jun Change 2000 €m 2001 %
Risk weighted assets
32
Forecast ForecastGrowth % 2000 2001 2002
Source: AIB Chief Economist, Group Treasury
Both internal and external factors slowing economy Inflation pressures to ease as economy slows 4-5% growth forecast over medium term remains intact
Real GDP 11.5 7.0 7.0
Domestic demand 9.7 6.0 5.8
Unemployment rate 4.2 3.8 4.0
Inflation (average) 5.3 4.5 3.5
Irish economic outlook
33
Alan Kelly [email protected] +353-1-6412162
Conor Herlihy [email protected] +353-1-6414191
Pat Clarke [email protected] +353-1-6412381
353-1-660 0311
353-1-641 2075
Our Investor Relations Department will be happy to facilitate
your requests for any further information
Visit our website www.aib.ie/investorrelations/home/
Contacts